Financial statements · 2020. 6. 24. · 95 Independent auditor’s report to the members of The...

Section 3 Financial statements

94

95

Independent auditor’s report to the members of The Alan Turing Institute

OpinionWe have audited the financial statements of The Alan Turing Institute for the year ended 31 March 2020 which comprise the Group Statement of Financial Activities, the Group Summary Income and Expenditure Account, the Group and Parent Charitable Company Balance Sheets, the Group Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements: — give a true and fair view of the state of the group’s and the parent charitable company’s affairs as at 31 March 2020 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;

— have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

— have been properly prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where

— the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

— the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group’s and parent charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

96


Other informationThe other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit:

— the information given in the strategic report and the trustees’ annual report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

— the strategic report and the trustees’ annual report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exceptionIn the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

— the parent charitable company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or

— the parent charitable company’s financial statements are not in agreement with the accounting records and returns; or

— certain disclosures of trustees’ remuneration specified by law are not made; or

— we have not received all the information and explanations we require for our audit.

97


Responsibilities of trusteesAs explained more fully in the trustees’ responsibilities statement set out on page 92, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group and parent charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the group and parent charitable company’s internal control.

98


We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Use of our reportThis report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters which we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charitable company and charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Shivani KothariSenior Statutory Auditor

Auditor’s responsibilities for the audit of the financial statements (continued)

— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the trustees.

— Conclude on the appropriateness of the trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and parent charitable company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or parent charitable company to cease to continue as a going concern.

— Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

— Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit report.

For and on behalf of: Moore Kingston Smith LLPStatutory Auditor24 June 2020

Devonshire House60 Goswell RoadLondonEC1M 7AD

99

Consolidated Statement of Financial ActivitiesIncorporating an income and expenditure account. For the year ended 31 March 2020.

2020 2020 2020 2019General Restricted Total Total

Note Funds Funds Funds Funds£ £ £ £

Income and endowments

Donations 2 2,112 - 2,112 -

Other trading activities 2,144,408 - 2,144,408 2,187,187

Investment income 103,704 - 103,704 24,083

Charitable activities

Grant income 3 10,192,371 23,571,766 33,764,138 37,187,603

Total Income 12,442,596 23,571,766 36,014,362 39,398,873

Expenditure

Raising funds 4 655,058 - 655,058 934,000

Charitable activities

Education and research 5 5,126,376 28,701,846 33,828,222 29,132,724

Total Expenditure 5,781,434 28,701,846 34,483,280 30,066,724

100

2020 2020 2020 2019General Restricted Total Total

Note Funds Funds Funds Funds£ £ £ £

Net income/(expenditure) for the year before transfers 8 6,661,162 (5,130,080) 1,531,082 9,332,149

Transfers between funds 19 (7,061,922) 7,061,922 - -

Net movement in funds (400,761) 1,931,843 1,531,082 9,332,149

Reconciliation of FundsBalance brought forwardat 1st April 2019 17,345,604 5,557,601 22,903,205 13,571,056

Balance carried forward 19-20 16,944,843 7,489,444 24,434,287 22,903,205 at 31st March 2020

Consolidated Statement of Financial ActivitiesIncorporating an income and expenditure account. For the year ended 31 March 2020.

101

Balance sheet — Group and charity At 31 March 2020

Group Group Charity CharityNote 2020 2019 2020 2019

£ £ £ £

Fixed Assets

Tangible assets 13 1,617,154 2,166,850 1,586,261 2,111,243

Intangible assets 14 21,011 37,822 -

Investments 15 - - 1 1

1,638,165 2,204,672 1,586,262 2,111,244

Current Assets

Debtors 16 6,833,483 9,747,251 6,761,573 8,240,719

Cash at bank and in hand 42,989,425 32,649,679 41,131,542 32,622,920

49,822,908 42,396,930 47,893,117 40,863,640

Creditors

Amounts falling due within one year 17 (23,140,964) (16,261,178) (22,065,779) (15,067,244)

Net Current Assets 26,681,944 26,135,752 25,827,338 25,796,396

102

The financial statements of The Alan Turing Institute were approved and authorised for issue by the Board of Trustees on 18 June 2020 and signed on its behalf by:

Balance sheet — Group and charity At 31 March 2020

Group Group Charity CharityNote 2020 2019 2020 2019

£ £ £ £

Creditors

Amounts falling due in more than one year 18 (3,885,822) (5,437,219) (3,885,822) (5,437,219)

Net Assets 24,434,287 22,903,205 23,527,778 22,470,421

Funds

Restricted funds 20 7,489,444 5,557,601 7,489,444 5,557,601

Unrestricted funds

Designated funds 19 1,891,376 2,000,000 1,891,376 2,000,000

General funds 19 15,053,467 15,345,604 14,146,958 14,912,820

Total Funds 20 24,434,287 22,903,205 23,527,778 22,470,421

These financial statements consolidate the results of the Charity and Turing Innovations Limited, its wholly owned trading subsidiary on a line by line basis. A separate Statement of Financial Activities and Income and Expenditure Account are not presented for the Charity itself as the Charity has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006. The net income of the charity was £1,057,356 (2019: £9,405,229).

The notes on pages 104 to 136 form part of these financial statements.

Howard CovingtonChair

The Alan Turing InstituteCompany number - 09512457

103

Consolidated Statement of Cash Flows For the year ended 31 March 2020

2020 2019£ £

Cash flows from operating activities

Net income for the year 1,531,082 9,332,149

Adjustments for:

Depreciation of tangible fixed assets 991,725 957,312

Amortisation of intangible fixed assets 16,811 16,811

Interest received (103,704) (24,083)

Loss on disposal of tangible fixed assets 8,920 1,318

Increase /(decrease) in debtors 2,913,768 (5,265,968)

Increase in creditors 5,328,389 12,116,279

Net cash generated by operating activities

10,686,990 17,133,818

2020 2019£ £

Cash flows from investing activities

Purchase of tangible fixed assets (450,949) (970,433)

Interest received 103,704 24,083

Net cash from investing activities

(347,245) (946,350)

Change in cash and cash equivalents in the period 10,339,746 16,187,468

Cash and cash equivalents at beginning of period 32,649,679 16,462,211

Cash and cash equivalents at end of the period

42,989,425 32,649,679

104

1.

Notes to the financial statementsFor the year ended 31 March 2020

Accounting PoliciesA summary of the principal accounting policies adopted, judgements and key sources of estimation uncertainty, is set out below.

Basis of PreparationThe financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The Charitable Company and its subsidiary is a public benefit group for the purposes of FRS 102 and therefore the Charity also prepared its financial statements in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (The FRS 102 Charities SORP), the Companies Act 2006 under the provision of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) and the Charities Act 2011.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest pound.

Going Concern The trustees have assessed whether the use of going concern basis is appropriate and have considered possible events or conditions that might cast significant doubt on the ability of the charitable company to continue as a going concern. The trustees have made this assessment for a period of at least one year from the date of the approval of these financial statements. In particular, the trustees have considered the charitable company’s forecasts and projections and have taken account of pressures on income. After making enquiries, the trustees have concluded that there is a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. The charitable company therefore continues to adopt the going concern basis in preparing its financial statements.

The trustees have assessed the consequences of the current COVID-19 pandemic and recognise that, whilst this will impact the research funding landscape in the UK and internationally, the Charity’s reserves are such that it expects to maintain positive cash flows and reserves for at least one year from the date of approval of these financial statements and as such the trustees are confident that the Charity will continue to operate as a going concern.

105

1.

IncomeAll income is recognised when there is entitlement to the funds, the receipt is probable and the amount can be measured reliably.

Donations and grants, including grants in respect of major items of refurbishment, improvements or the purchase of fixed assets are recognised in the Statement of Financial Activities when receivable. Where income is received in advance of meeting any performance-related conditions there is not unconditional entitlement to the income and its recognition is deferred and included in creditors as deferred income until the performance-related conditions are met.

ExpenditureExpenditure is included in the Statement of Financial Activities on a accruals basis, inclusive of any VAT which cannot be recovered. Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

Grants payable are payments made to third parties in the furtherance of the charitable objects of the Charity. Unconditional grant offers are accrued once the recipient has been notified of the grant award and its payment is probable. Grant awards that are subject to the recipient fulfilling performance or other conditions are accrued when the recipient has been notified of the grant and either the performance condition is met or any remaining unfulfilled condition attaching to the grant is outside of the control of the Charity.

Cost of Raising FundsThe cost of raising funds consists of the direct costs of raising funds and an apportionment of overhead, support and governance costs.

Cost of Charitable ActivitiesCosts of charitable activities include costs directly associated with research activities and an apportionment of overhead, support and governance costs.

Gifts In KindWhere goods are provided to the charity as a donation that would normally be purchased from suppliers this contribution is included in the financial statements as an estimate based on the value of the contribution to the charity.

Tangible Fixed Assets and DepreciationDepreciation of tangible fixed assets is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Leasehold Land and Buildings: Term of leaseFixtures, fittings and fittings: 5 yearsIT Equipment: 3 to 5 years

Tangible fixed assets costing more than £1,000 are capitalised.


106

1.

Intangible Fixed Assets and AmortisationAmortisation of intangible fixed assets is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Software 3-5 years

Intangible fixed assets costing more than £1,000 are capitalised.

Fund AccountingGeneral unrestricted funds are those available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes.

Cash and Cash EquivalentsCash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

Financial InstrumentsBasic financial instruments are measured at amortised cost other than investments which are measured at fair value.

With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. See notes 16, 17 and 18 for the debtor and creditor notes.

Employee BenefitsThe costs of short-term employee benefits are recognised as a liability and an expense.

Critical Accounting Estimates and Areas of JudgementIn preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The following judgements and estimates are considered by the trustees to have most significant effect on amounts recognised in the financial statements.


1.(i)

Depreciation – The annual depreciation charge for property, plant and equipment is sensitive to change in the estimated useful economic lives and residual value of assets. These are reassessed annually and amended where necessary to reflect current circumstances.

107

2.

Donations

2020 2020 2020 2019Unrestricted Restricted Total Total

£ £ £ £

Other 2,112 - 2,112 -

2,112 - 2,112 -


108

Grants income

3.

2020 2020 2020 2019Unrestricted Restricted Total Total

£ £ £ £

Research Councils

EPSRC 2,000,000 - 2,000,000 8,200,000

EPSRC - Strategic Priorities Fund - 9,412,906 9,412,906 5,013,780

AHRC - Strategic Priorities Fund - Living with Machines - 1,541,004 1,541,004 1,487,485

University Partners -

Founder University Partners - 5,000,000 5,000,000 5,000,000

Other University Partners 8,000,000 - 8,000,000 8,000,000

Strategic Research Partners -

HSBC - - - 6,826

Intel - - - 516,076

Lloyd's Register Foundation - 2,780,918 2,780,918 3,853,091

Gates Foundation - 1,457,498 1,457,498 -

Other research grants 192,371 3,379,440 3,571,812 5,110,345

10,192,371 23,571,766 33,764,138 37,187,603


109

Cost of raising funds

4.

2020 2019Total Total

£ £

Cost of raising funds 655,058 934,000

655,058 934,000


110

Cost of charitable activities

5.

2020

Grants Payable (See below)

Other Direct Costs

Support Costs (Note 6) Total

£ £ £ £

Research 17,256,255 10,588,751 5,162,475 33,007,480

Workshops and conferences - 820,742 - 820,742

17,256,255 11,409,493 5,162,475 33,828,222

2019

Grants Payable (See below)

Other Direct Costs

Support Costs (Note 6) Total

£ £ £ £

Research 16,994,804 7,054,021 4,653,721 28,702,546

Workshops and conferences - 430,178 - 430,178

16,994,804 7,484,199 4,653,721 29,132,724


111

Analysis of grants payable

5.

In accordance with FRS102 and the Charity SORP, these financial statements account for the full expected cost of research grants awarded by the Institute within each financial year. The contractual terms of these grants can include durations of up to 36 months in length.

2020 2019£ £

Analysis of institutions receiving grants

The British Library 539,331 350,000Imperial College London 369,958 1,421,191Queen Mary University London 1,103,568 624,948Science and Technology Facilities Council 1,030,000 741,041

University College London 1,704,706 1,721,824University of Birmingham 737,604 654,818University of Cambridge 1,436,708 1,945,660University of Edinburgh 1,169,489 1,165,485University of Exeter 2,203,519 -University of Leeds 1,803,179 892,590University of Manchester 628,137 372,786University of Newcastle 156,798 367,927University of Oxford 1,305,341 3,568,929University of Southampton 475,104 255,504University of Warwick 2,418,889 1,697,870

Other 173,924 1,214,231

17,256,255 16,994,804


112

Support costs

6.

2020 2019£ £

Travel and subsistence 48,060 43,285Office costs 41,497 73,571Rent, rates and service charge 633,383 569,455Repairs and maintenance 6,087 4,191Subscriptions 126,756 89,514Staff costs 2,346,426 1,788,474Staff training and hospitality 133,928 39,403Recruitment 188,579 56,860Telecommunications 22,657 19,563Computer running costs 321,642 530,168Legal fees 266,098 264,411Other professional fees 66,051 155,417Consultancy 115,894 172,041Depreciation 788,082 758,445Amortisation 16,811 16,811Insurance 54,710 31,660Marketing 5,766 42,084Foreign exchange gain (102,864) (42,543)Sundry costs 8,287 7,341Governance costs (see note 7) 74,625 33,570

5,162,474 4,653,721


113

Governance costs

7.

2020 2019£ £

Auditor's remuneration:

Audit of the financial statements (current year) 31,760 14,315

Audit of the financial statements (prior year under accrual)

34,734 -

Other services 7,064 4,705

Legal and professional fees 1,067 14,550

74,625 33,570


114

Net income/(expenditure)

8.

2020 2019£ £

Net income is stated after charging:

Depreciation 788,082 957,312

Amortisation 16,811 16,811

Operating lease rentals 938,606 859,909

Auditor's remuneration

Audit of the financial statements 66,494 14,315

Other services 7,064 4,705


115

Staff costs

9.

2020 2019£ £

Staff expenses includes the following employee costs:

Wages and salaries 7,830,171 4,767,732

Social security costs 847,806 528,639

HMRC apprenticeship levy 23,111 8,940

Other staff costs

Contractors 319,373 454,037

Secondments 1,048,480 830,345

Pension costs 676,197 429,789

10,745,139 7,019,482

Key management personnel include those involved in executive decision-making and are listed in Part 2 of this report. The total employee benefits of the charity's key management personnel was £1,025,335 (2019: £778,533).

Included in the above costs are termination payments to 1 individuals totalling £32,677 (2019: 0 individuals totalling £nil).


116

Staff costs (Continued)

9.

During the year the following number of employees received emoluments in excess of £60,000:

2020 2019

£60,000- £69,999 5 7

£70,000- £79,999 8 2

£80,000- £89,999 4 5

£90,000- £99,999 3 -

£110,000- £119,999 - 1

£150,000- £159,999 - 2

£160,000 - £169,999 1 -

£170,000 - £179,999 1 -

£180,000- £189,999 - 2

£190,000 - £199,999 1 -


117

Trustees’ payments

10.

Howard Covington received remuneration totalling £30,000 (2019: £29,000) during the year for the purpose of being Chairman of the Charity. No other trustee received any remuneration or emoluments.

2 trustees received travelling and accommodation expenses during the period totalling £158 (2018: three trustees, £3,060).


118

Employees

11.

2020 2019Number Number

The average number of employees by function were:

Executive 10 7

HR, Finance & Operations 24 17

Communications and Events 13 11

Research and Research support 102 57

Information Technology 5 5

Business Partnerships 28 12

182 109


119

Taxation

12.

The charity is entitled to certain tax exemptions on income and profits from investments and surpluses on any trading activities carried on in furtherance of the charity’s primary objectives.


120

Tangible fixed assets — Group

13.

EquipmentLeasehold and

Improvements Machinery Total£ £ £

Cost or valuation

At 1 April 2019 2,634,331 1,473,310 4,107,641

Additions 39,934 411,015 450,949

Disposal - (11,361) (11,361)

At 31 March 2020 2,674,265 1,872,964 4,547,229

Depreciation

At 1 April 2019 1,121,617 819,174 1,940,791

Charge for the year 556,678 435,047 991,725

Eliminated on disposal - (2,441) (2,441)

At 31 March 2020 1,678,295 1,251,780 2,930,075

Net Book Value

At 31 March 2020 995,970 621,184 1,617,154

At 31 March 2019 1,512,714 654,136 2,166,850


121

Tangible fixed assets — Charity

13.

EquipmentLeasehold and

Improvements Machinery Total£ £ £

Cost or valuation

At 1 April 2019 2,634,331 1,374,455 4,008,786

Additions 39,934 411,015 450,949

Disposal - (11,361) (11,361)

At 31 March 2020 2,674,265 1,774,109 4,448,374

Depreciation

At 1 April 2019 1,121,618 775,925 1,897,543

Charge for the year 556,678 410,333 967,011

Eliminated on disposal - (2,441) (2,441)

At 31 March 2020 1,678,296 1,183,817 2,862,113

Net Book Value

At 31 March 2020 995,969 590,292 1,586,261

At 31 March 2019 1,512,713 598,530 2,111,243


122

Intangible fixed assets — Group

14.

Software£

Cost or valuation

At 1 April 2019 and 31 March 2020 67,241

Amortisation

At 1 April 2019 29,419

Charge for the year 16,811

At 1 April 2019 and 31 March 2020

46,230

Net Book Value

At 1 April 2019 and 31 March 2020

21,011

At 31 March 2019 37,822


123

Investments in subsidiaries

15.

Investment inSubsidiary

£

Cost

At 1 April 2019 and 31 March 2020 1

The investment represents 100% of the share capital of Turing Innovations Ltd, a company incorporated in England & Wales, company number 10015591. The following is an extract of its results for the year to 31 March 2020:

2020£

Income 2,144,408

Expenditure (1,293,506)

Net income 850,902

Total assets 3,647,272

Total liabilities (2,740,763)

Net assets 906,509


124

Debtors

16.

Group Group Charity Charity2020 2019 2020 2019

£ £ £ £

Trade debtors 2,750,160 9,029,033 1,467,044 6,374,109

Tax and social security - - 49,193 289,828

Prepayments and accrued income 4,028,174 691,071 3,573,802 691,071

Intercompany - - 1,616,385 858,564

Other debtors 55,149 27,147 55,149 27,147

6,833,483 9,747,251 6,761,573 8,240,719

Trade debtors above are measured at amortised cost.


125

Creditors: amounts falling due within one year

17.


£ £ £ £

Trade creditors 322,020 641,887 322,020 641,887

Taxation and social security 738,140 593,505 277,490 194,732

Grant creditors 18,193,092 12,791,130 18,193,092 12,791,130

Accruals and deferred income 3,762,705 2,162,953 3,148,169 1,367,792

Other Creditors 125,007 71,703 125,007 71,703

23,140,964 16,261,178 22,065,779 15,067,244


126

18.

Creditors: amounts falling due in more than one year


£ £ £ £

Grant creditors 3,885,822 5,437,219 3,885,822 5,437,219


127

Unrestricted funds

19.

At Balance01.04.19 Income Expenditure Transfers 31.03.20

£ £ £ £ £

General Fund 14,912,820 10,295,221 (4,376,338) (6,684,745) 14,146,958

Designated funds

Safe and ethical AI fund 2,000,000 2,966 (111,590) - 1,891,376

Charity Total 16,912,820 10,298,188 (4,487,928) (6,684,745) 16,038,335

Turing Innovations Limited 432,784 2,144,408 (1,293,506) (377,177) 906,509

Group Total 17,345,604 12,442,596 (5,781,434) (7,061,922) 16,944,843


£ £ £ £ £

General Fund 8,499,153 17,306,037 (2,177,822) (8,714,548) 14,912,820


Designated funds includes donations in 2018/19 from Aphorism Foundation (£1m) and DeepMind Technologies Limited (£1m). Both donations are unrestricted but are given in support of the Institute's work on Safe and Ethical AI. It is expected that these amounts will be spent within 4 years.

The defence and security fund, which operates out of Turing Innovations Limited, will finance the Institute's data-driven defence and security programme.

128

20.


£ £ £ £ £

a EPSRC Capital fund 3,003,883 - (539,163) (938,078) 1,526,642

b EPSRC - AI for Science, Government and Health fund 874,758 9,412,906 (7,059,242) - 3,228,422

c AHRC - Living with Machines fund 333,906 1,541,004 (1,967,088) - (92,177)

d Lloyd's Register Foundation fund 1,962,219 2,780,918 (2,380,248) - 2,362,889

e HSBC fund 1,512,559 - (957,516) - 555,043

f Intel Corporation fund 660,182 - (150,441) - 509,741

g University partner research fund (4,592,382) 5,000,000 (12,568,469) 8,000,000 (4,160,851)

h Gates Foundation - 1,457,498 (77,901) - 1,379,597

i Other research fund 1,802,476 3,379,440 (3,001,778) - 2,180,138

Charity and consolidated restricted

5,557,601 23,571,766 (28,701,846) 7,061,922 7,489,444

Restricted fundsNotes to the financial statementsFor the year ended 31 March 2020

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20.

Restricted funds (continued)

Restricted reserves are in line with the expectations of the Board and are reflective of the early stage of both the specific activities that they will fund and of the Institute itself

a The EPSRC capital fund was granted by the Engineering and Physical Sciences Research Council for the purposes of capital expenditure on Turing premises. The transfer to unrestricted funds has been authorised by the funder to cover office rent costs.

b The EPSRC AI and Data Science for Science, Engineering, Health and Government was awarded from UKRI's wave 1 Strategic Priorities Fund to develop technologies of AI that underpin various economic sectors.

c The AHRC Living with Machines fund was awarded from UKRI's wave 1 Strategic Priorities Fund to devise new methods of applying data science and AI to historical resources.

d The Lloyds Register Foundation fund will finance a research programme that supports data-centric engineering.

e The HSBC fund will finance a research programme that supports collaboration in finance and economics.

f The Intel Corporation fund will finance data science and its application.


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20.

Restricted funds (continued)

g The university partner research fund is the unspent amount received from the Charity's university partners to fund future research activity.

The fund is currently in deficit by £4,160,851 (2019: deficit £4,592,382). This has arisen due to a timing difference, with multiyear expenditure grants for research fully accrued in the current and prior year but income to fund these due to be recognised in future years. The fund is expected to become positive over the life span of the relevant income grant agreements. Accordingly no transfer has been made in the 2019/20 financial statements to set the restricted fund balance to £nil but consideration has been given to this deficit when reviewing the Institute's year-end position with regard to its approved reserves policy.

h The Gates Foundation award will fund a research programme focussed on enhancing security and privacy of national identity systems.

i Other research fund represents various research grants from charities, business and government departments to fund specific research collaborations.


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20.

RestatedAt Balance

01.04.18 Income Expenditure Transfers 31.03.19£ £ £ £ £

a EPSRC Capital fund 3,114,385 1,200,000 (450,593) (859,909) 3,003,883

b EPSRC - AI for Science, Government and Health fund - 5,013,780 (4,139,021) 874,759

c AHRC - Living with Machines fund - 1,487,485 (1,153,579) 333,906

d Lloyd's Register Foundation fund 321,697 3,853,091 (2,212,569) - 1,962,219

e HSBC fund 1,863,125 6,826 (357,392) - 1,512,559

f Intel Corporation fund 326,946 516,076 (182,841) - 660,181

g University partner research fund (2,171,667) 5,000,000 (15,420,714) 8,000,000 (4,592,381)

h Other research fund 1,111,554 2,828,391 (2,137,469) - 1,802,476

Charity restricted 4,566,040 19,905,649 (26,054,178) 7,140,091 5,557,602

i Turing Innovations Limited- GCHQ - Defence and Security 505,863 2,187,187 (1,834,723) (858,327) -

Consolidated restricted total 5,071,903 22,092,836 (27,888,901) 6,281,764 5,557,602

Restricted funds (continued)Notes to the financial statementsFor the year ended 31 March 2020

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21.

Analysis of net group assets between funds

Unrestricted Restricted Total£ £ £

At 31 March 2020

Tangible fixed assets 1,586,262 30,892 1,617,154

Intangible fixed assets - 21,011 21,011

Net current assets 15,358,581 11,323,363 26,681,944

Long term creditors - (3,885,822) (3,885,822)

16,944,843 7,489,444 24,434,287

Unrestricted Restricted Total£ £ £

At 31 March 2019

Tangible fixed assets 2,097,368 69,482 2,166,850

Intangible fixed assets - 37,822 37,822

Net current assets 15,248,236 10,887,516 26,135,752

Long term creditors - (5,437,219) (5,437,219)

17,345,604 5,557,601 22,903,205


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22.

Financial commitments

The charitable company was committed to making the following total payments under non-cancellable operating leases as at 31 March 2020:

2020 2019£ £

Payments due:

Within one year 938,078 940,777

Between 2 and 5 years 731,293 1,661,400

1,669,371 2,602,177


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23.

Related parties

During the year the following transactions were undertaken with the members of the charity. Other than the amounts noted below, no amounts were due or payable at the period end.

Current year to 31/03/2020Grant expenditure Grant income Re-charged Period end

awarded received expenditure Debtor/(creditor)£ £ £ £

Engineering and Physical Sciences Research Council - 11,412,906 - -

University of Cambridge 1,031,389 1,000,000 141,849 252,000

University of Edinburgh 781,397 1,000,000 539,457 58,649

University of Oxford 864,869 1,000,000 439,155 103,034

University College London 932,424 1,000,000 - 250,000

University of Warwick 1,312,161 1,000,000 478,605 230,519

4,922,240 16,412,906 1,599,066 894,203


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Related parties (Continued)

Prior year to 31/03/2019Grant expenditure Grant income Re-charged Period end

awarded received expenditure Debtor/(creditor)£ £ £ £

Engineering and Physical Sciences Research Council - 13,213,780 - -

University of Cambridge 1,945,660 1,000,000 87,198 (2,324)

University of Edinburgh 1,165,485 1,000,000 56,817 (4,613)

University of Oxford 3,568,929 1,000,000 268,839 117,414

University College London 1,721,824 1,000,000 149,518 (12,755)

University of Warwick 1,697,870 1,000,000 211,997 250,000

10,099,768 18,213,780 774,369 347,722

The re-charged expenditure relates to staff time, administration and workshop costs

Transactions with subsidiary

During the year the parent charity re-charged staff and other costs to the subsidiary company, Turing Innovations Limited of £483,073 (2019: £808,205).

During the year Turing Innovations Limited made a gift aid distribution to the Alan Turing Institue of £377,176 (2019: £425,543).

At the year end Turing Innovations Limited owed The Alan Turing Institute £1,616,385 (2019: £858,567).


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24.

Company status

The charity is a company limited by guarantee. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity.


Financial statements · 2020. 6. 24. · 95 Independent auditor’s report to the members of The...

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